A housing cooperative is a form of ownership in which a person purchases shares (or membership) in a cooperative corporation that was formed for the purpose of providing its members a place in which to live. The cooperative corporation owns the building, apartments and all common elements. The owners/ members, in turn, own the corporation.
The instrument of ownership is called different things in different associations. Some issue “shares of stock,” some a “proprietary lease” and others a “perpetual use and equity contract.” Regardless of what the ownership document is called, the effect is the same. It conveys the perpetual use of a specified unit – usually an apartment, sometimes a townhouse – together with the right to sell it subject to the co-op’s approval and the obligation to support the co-op by paying fees.